Citigroup earnings lead stocks higher

Stocks began the week higher as Dow is trying to post a new high for 2010 (just 100 away).  Dow rose 33, advancers over decliners 3-2 but NAZ was flat.  Citi (C) posted good earnings (that means above zero) which is helping bank stocks.

S&P 500 FINANCIALS INDEX

Value	195.26
Change	2.34  (1.2%)

The Alerian MLP index is up a few pennies, to just over 350 while the Dow Jones REIT Index is up 1, going above 220 (its yearly high).  Junk bond funds were a little higher.  Treasuries were also strong as the yield on the 10 year Treasury bond fell 6 basis points to 2.51% remaining in very low & worrisome territory.
 

Treasury yields

U.S. 3-month		0.13%
U.S. 2-year		0.35%
U.S. 10-year		2.51%

Alerian MLP Index   ---   2 weeks



Dow Jones REIT Index   ---   2 weeks



10-Year Treasury Yield Index   ---   2 weeks




Oil rose for the first time in 3 days as the dollar pared gains against the € & as a strike in France spread.  Gold is resting after its reaching new record highs last week.

CLX10.NYM

...Crude Oil Nov 10

...82.27

.... 1.02

(1.3%)

GCV10.CMX

...Gold Oct 10

.......1,364.50

... 6.60

(0.5%)

Gold Super Cycle Link! Click Here

Photo:  Bloomberg


The Federal Reserve reported that output at the nation's factories, mines & utilities dropped 0.2% in Sep for the first time since the recession ended, as weak consumer demand led factories to a pull back.  Industrial production grew 4.8% in Q3, slower than the 7% gains in each of the first 2 qtrs of 2010.  Factory output, the largest element of industrial production, fell 0.2% last month. Manufacturing posted monthly gains for the first year after the recession ended in June 2009, but since then it has fallen twice in the past 4 months.  American factories were operating at 74.7% of capacity in Sep, down 0.1% from Aug, the first drop since Jun 2009, when the recession ended.

Production in U.S. Unexpectedly Falls for First Time in a Year


Factory production - 1 year

Photo:  Bloomberg


The National Association of Home Builders said its monthly index of builders' sentiment rose in Oct to 16, the first increase in 5 months. The index had been at 13 for the past 2 months, the lowest level since Mar 2009.  The Oct reading was equal to Jun.  Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in Apr 2006.  Builders are pessimistic about the housing market, but are seeing a little more foot traffic after the worst summer for sales in a decade.  High unemployment, slow job growth & tight credit have kept people from buying homes.

U.S. Homebuilder Confidence Rose to Four-Month High in October, NAHB Says


Builder confidence index - 1 year





Citigroup, still 12% owned by the gov, reported its 3rd straight qtr of profits as losses from failed loans narrowed.   Citi had EPS of 7¢ compared to a 27¢ loss last year (a penny better than expectations).  These results included a previously announced $800M pretax loss tied to the sale of Student Loan Corp.  Losses from bad loans fell 30% in Q3 to $7.66B as defaults in Citi's retail partner cards, Citi-branded credit cards & real estate portfolios all fell.  Citi released almost $2B it had previously set aside to cover bad loans.  The stock rose 14¢ to $4.09 after lumbering along in the depths for almost 2 years.  During the financial crisis, Citi received $45B in gov aid & $25B was converted to stock.  The gov continues to sell shares in Citi.


Citigroup Profit Beats Estimates on Decline in Loss Provisions

Citigroup   ---   2 years





This is another day with little happening in the markets.  Citi earnings were about what was expected.  Earnings are benefiting from cost cutting & lower losses, but top line growth remains elusive as at most banks.  Gold is taking a breather, but is still very near last week's record levels.  Dow needs to break thru the top of this chart for a new 2010 high.

Dow Jones Industrials   ---   2 weeks

Futures Prices!! 

Click Here

Find out what's inside Trend TV!  

Click Here

Get your favorite symbols' Trend Analysis TODAY!  

Click Here